Pinterest cancels office lease in unbuilt project, citing work-from-home shift(sfchronicle.com)
sfchronicle.com
Pinterest cancels office lease in unbuilt project, citing work-from-home shift
https://www.sfchronicle.com/business/article/Pinterest-cancels-huge-SF-office-lease-in-unbuilt-15523170.php
152 コメント
I’d like to see communities support non profit coworking spaces to attract talent.
Like a library, with wifi, printers, a coffee bar, and a few EV charging parking spots. My coworking space has these amenities, I happily provide financial support.
The days of communities catering to businesses to move to them is over. Cater to remote workers (Tulsa, OK has a great campaign for this). They’re the ones bringing dollars.
Like a library, with wifi, printers, a coffee bar, and a few EV charging parking spots. My coworking space has these amenities, I happily provide financial support.
The days of communities catering to businesses to move to them is over. Cater to remote workers (Tulsa, OK has a great campaign for this). They’re the ones bringing dollars.
> People will still need to get out of the house.
I'm not sure if you're in a California city mindset, but it's easy if you move to a suburb of a city like Atlanta. You can have over an acre of wooded land and be less than an hour's commute to the city. It's super affordable too. 300k gets you 3000sqft and sometimes more.
If you're willing to pay double, you can have the same within thirty minutes of the city. And there are still spacious priorities within the city limits.
I'm not sure if you're in a California city mindset, but it's easy if you move to a suburb of a city like Atlanta. You can have over an acre of wooded land and be less than an hour's commute to the city. It's super affordable too. 300k gets you 3000sqft and sometimes more.
If you're willing to pay double, you can have the same within thirty minutes of the city. And there are still spacious priorities within the city limits.
If you don't need a decent school zone, can confirm.
38 minutes from downtown. 3 acre wooded lot. 1900 sq ft house (currently refinishing full basement). $135 when I bought, probably $200 now. In the process of selling a much more expensive intown house, because there's no point.
The biggest things suburbs need to do these days is revolutionize malls. Tear up all the parking and retrofit empty store space into community-centric things people actually want.
Big box -> co-working space, as new anchor tenant.
38 minutes from downtown. 3 acre wooded lot. 1900 sq ft house (currently refinishing full basement). $135 when I bought, probably $200 now. In the process of selling a much more expensive intown house, because there's no point.
The biggest things suburbs need to do these days is revolutionize malls. Tear up all the parking and retrofit empty store space into community-centric things people actually want.
Big box -> co-working space, as new anchor tenant.
Interestingly, if you go north of Atlanta, you can find examples of the new "downtown" areas that have been built in the last few years to replace malls. Avalon: https://www.experienceavalon.com/ Halcyon: https://www.visithalcyon.com/ Alpharetta City Center: http://www.citycenteralpharetta.com/ All 3 within 5 miles of each other
Used to live down the road from Avalon. I'd say it's better than a mall, but still too profit-first to be when I'd hope we're pivoting towards.
As context for others, Avalon is a mixed-use development, with restaurants and shops on the first floor (of ~3). Definitely still anchor-tenant focused (movie theater, larger clothing retailers) & restaurant weighted.
IMHO, the type of place you visit to do things, then leave. Not the type of place you live.
But then, my opinion is that Atlantic Station should be nuked from orbit for the sin of isolating itself from the transit grid, so I'm probably on the get-off-my-lawn side of the planner/developer split.
As context for others, Avalon is a mixed-use development, with restaurants and shops on the first floor (of ~3). Definitely still anchor-tenant focused (movie theater, larger clothing retailers) & restaurant weighted.
IMHO, the type of place you visit to do things, then leave. Not the type of place you live.
But then, my opinion is that Atlantic Station should be nuked from orbit for the sin of isolating itself from the transit grid, so I'm probably on the get-off-my-lawn side of the planner/developer split.
>IMHO, the type of place you visit to do things, then leave. Not the type of place you live.
But then people pay very high rents to live. $1600 or so for a studio.
But then people pay very high rents to live. $1600 or so for a studio.
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Atlantic Station replaced a hulking eyesore of a shuttered steel mill. Not gonna find that much property in midtown Atlanta on top of a rail station. Not a big fan of Atlantic Station, it does not feel authentic to me, built on top of a parking garage
In a world of remote k-12 schooling, hopefully real estate values tied to school zones will be history.
Right on, I too believe a big chunk of the future office will look a lot more like a Starbucks, or the main lobby of a WeWork. A place to hang out with your coworkers, and a quit room for occasional meeting, an office that you visit once or twice a week, or maybe a month. It still makes a lot of sense to meet at a place that's not a public coffee shop, but has all the atmosphere and amenities.
I would think people hated going to the office when offices were bland and isolated in remote locations. Cities are heavily adapted to separate work/office locations. They 'll adapt to remote, like they always do. People will need to invent new ways of life.
There's a lot of reasons to get out of one's house. Work is merely one of them. With the small (but measurable) exodus from Silicon Valley, people are choosing areas that offer more than work as the only reason to leave the house (though, there are many scenic things to do in the Bay Area). However, there are scenic things to do elsewhere too at a fraction of the cost.
After this, fly into the Bay Area when you need to. Things like performance reviews, and strategic planning ought to be in person. But the world is speculating day-to-day software development tasks may not need physical proximity. At least, we'll find out the benefits/consequences of that decision in the years to come.
After this, fly into the Bay Area when you need to. Things like performance reviews, and strategic planning ought to be in person. But the world is speculating day-to-day software development tasks may not need physical proximity. At least, we'll find out the benefits/consequences of that decision in the years to come.
This doesn’t work as much on most of the west coast but any city which was big a century ago probably has nice railway suburbs which are walkable because they were built before the one person, one car assumption became the foundation of American urban design.
I think areas like that will see an uptick in interest from people who weren’t keen on an hour+ daily commute into a major city but are far more willing to consider it if you’re talking a few times a month.
Before we bought we looked around in a few cities and were really struck by the quality of life difference it makes when you drive occasionally but not by necessity. Even the younger residents in newer, pricier suburbs tend to pack on weight and health problems unless they’re absolutely rigorous about going to the gym and have the schedule to support it. The white-flight suburbs built in the decades after Brown v. Board are often actively hostile to a healthy lifestyle (no sidewalks, winding roads, transit happens in other zip codes).
I think areas like that will see an uptick in interest from people who weren’t keen on an hour+ daily commute into a major city but are far more willing to consider it if you’re talking a few times a month.
Before we bought we looked around in a few cities and were really struck by the quality of life difference it makes when you drive occasionally but not by necessity. Even the younger residents in newer, pricier suburbs tend to pack on weight and health problems unless they’re absolutely rigorous about going to the gym and have the schedule to support it. The white-flight suburbs built in the decades after Brown v. Board are often actively hostile to a healthy lifestyle (no sidewalks, winding roads, transit happens in other zip codes).
> winding roads
Don't get me started on the folly of single-path, non-grid road planning. It's literally encoding the assumption "There will never be more than X people living here" into the city fabric.
And then in 10 years people wonder why traffic is so bad...
Don't get me started on the folly of single-path, non-grid road planning. It's literally encoding the assumption "There will never be more than X people living here" into the city fabric.
And then in 10 years people wonder why traffic is so bad...
Exactly - and there’s a wicked cascade effect where people get angry that their commute which is “supposed” to take 20 minutes (i.e. 30) now takes 50, and feel that they’re allowed to speed and run stop signs to make up the difference. I stopped using Waze/Google Maps because the estimates are always wildly low and Waze tends to route you through roads which were never designed to be safe at the limit.
You would rather commute and sit in office as your social activity instead of doing sports/dance/art at your own leisure?
I'm wondering if we are on the verge of a commercial property apocalypse. If rents are eventually forced down in large metropolitan areas it will wipe out billions of dollars in property wealth. Could make the GFC look like a blip.
Commercial real estate is around a $16T industry in the USA: https://www.reit.com/data-research/research/nareit-research/...
Even with a correction in demand there will still be value in the property. The industry will not be wiped out.
Even with a correction in demand there will still be value in the property. The industry will not be wiped out.
There’s evidence of properties in NYC which have been vacant for 7+ years. These properties, even with the pandemic, have not budged their rent. They simply do not care if they’re not making money. They would rather preserve their capital, bank on appreciation, and not deal with tenants than fall prey to deflationary pressures.
The only explanation is the prevalence of some form of money laundering, an area I’m not an expert in.
The only explanation is the prevalence of some form of money laundering, an area I’m not an expert in.
These property owners are going to become like the Bitcoin HODLers. Their approach is sound as long as they are just riding out bumps in an economic cycle but will fall apart when their is a societal shift.
Commercial real estate is going the way of the newspaper industry - it will not go away, there will remain some successful examples, but the industry as a whole will be decimated.
Commercial real estate is going the way of the newspaper industry - it will not go away, there will remain some successful examples, but the industry as a whole will be decimated.
> They would rather preserve their capital, bank on appreciation, and not deal with tenants than fall prey to deflationary pressures
New York and San Francisco laws capping rent increases also deter rent decreases. Particularly if the decrease might wind up being temporary.
New York and San Francisco laws capping rent increases also deter rent decreases. Particularly if the decrease might wind up being temporary.
They are reluctant to move the rent because commercial property value is highly dependent on the "perceived" rental value. Locking in low rents instantly wipes out the buildings value.
that's not the only explanation. they are plenty of lit market public policy outcomes that promote irrational markets.
its better that you aren't an expert in the lit market or the dark markets, god forbid the people form enough consensus to actually change it.
its better that you aren't an expert in the lit market or the dark markets, god forbid the people form enough consensus to actually change it.
Not an expert either, but money laundering does seem to like real estate.
30% market correction will effectively wipe out many players in commercial real estate. Even less than that for many. Keep in mind, real estate is often highly levered so these property owners still have to pay a bank their money.
They’d just be underwater. But if the property is cash flow positive, over time they’d recover.
The side effect is many metropolitan areas will be scrambling to make up loss tax revenue and if previous down turns are an example they are loathe to give up even questionable outlays. So this loss will be felt by investors and local governments
I still suspect companies which own their office properties will be willing to give it up, it never ceases to amaze me the pride some executives put into having their own head quarters with all the amenities. Some come across as offended when workers want to extend the work from home situation all the while praising their people for doing so well while working from home.
I still suspect companies which own their office properties will be willing to give it up, it never ceases to amaze me the pride some executives put into having their own head quarters with all the amenities. Some come across as offended when workers want to extend the work from home situation all the while praising their people for doing so well while working from home.
Things will simply evolve. People said the same thing about industrial buildings in cities which are now thriving residential complexes. Lord and Taylor’s flagship store in Manhattan went bust and was going to become a WeWork, then when WeWork imploded the building was bought by Amazon and will become their offices. There won’t be a “property apocalypse” but there will be a “property evolution.”
In cities with diverse economies and a strong talent base this evolution happens quite quickly. Elsewhere it happens more slowly, and thus it’s more painful, but it will eventually happen there too.
In cities with diverse economies and a strong talent base this evolution happens quite quickly. Elsewhere it happens more slowly, and thus it’s more painful, but it will eventually happen there too.
That evolution is coming strangely close to us becoming company towns owned by billionaires. Little Vendorvilles everywhere. I wonder how much property Amazon will accumulate in the next few years.
edit: Oh, yeah, I pay rent and insurance to Berkshire today, guess I'm there.
edit: Oh, yeah, I pay rent and insurance to Berkshire today, guess I'm there.
Life could be better in company towns. They can create ecosystems of jobs that could better support the company's goals, and as the company reinvests funds to improve the quality of life and attract talent and labor, you could see improvements in things such as mass transit or perhaps a privatized police force with better accountability.
This is satire right?
The history of the company town is not all negative. Many company model towns were truly built to provide a better quality of life for workers, albeit with some very paternalistic overtones and often a desire to make them better workers as well.
Interestingly, the modern US military base still often resembles a company town. While not perfect, my impression is that life isn't worse then off base.
Interestingly, the modern US military base still often resembles a company town. While not perfect, my impression is that life isn't worse then off base.
You're a lower enlisted. You live in an apartment complex, sharing a stairwell with 5 other lower enlisted families. One of you is tagged as stairwell coordinator. It's now your job to get everyone in that stairwell to clean the area regularly. If you fail, your boss hears about it.
You get promoted, you're now given duplex housing in the NCO housing area. You now have a yard. Your grass grows too long. The military police ticket you, and notify your supervisor.
You goto the store on post. A coworker is there. He's with some girl who isn't his wife.
You goto the dining facility. You have to go to the dining facility because your paycheck is automatically deducted $300+ a month because you are forced to have a meal card, regardless of how often you eat there.
Just a few examples from people I know. Everyone tries to get statement of non-availability so they can live off base.
You get promoted, you're now given duplex housing in the NCO housing area. You now have a yard. Your grass grows too long. The military police ticket you, and notify your supervisor.
You goto the store on post. A coworker is there. He's with some girl who isn't his wife.
You goto the dining facility. You have to go to the dining facility because your paycheck is automatically deducted $300+ a month because you are forced to have a meal card, regardless of how often you eat there.
Just a few examples from people I know. Everyone tries to get statement of non-availability so they can live off base.
A company town has no inherent need to police such vanities or moral character. It would be no worse than living somewhere with an HOA.
Fair. This makes sense. I didn't think of militaries as companies.
I guess the ideal situation is when your goals align with what the company wants out of you.
I guess the ideal situation is when your goals align with what the company wants out of you.
The opportunity of company towns is the opportunity of dictatorships: with fewer decision makers, longer-sighted decision can be rammed through.
For example, California could presumably make better housing decisions if existing property owners didn't get a say.
That said, the weaknesses of dictatorships obviously apply equally. A benevolent dictator leads to great happiness; a terrible one leads to hell that can only be overthrown by revolution.
For example, California could presumably make better housing decisions if existing property owners didn't get a say.
That said, the weaknesses of dictatorships obviously apply equally. A benevolent dictator leads to great happiness; a terrible one leads to hell that can only be overthrown by revolution.
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That's an optimistic take (are you being sarcastic?). We've seen something similar with company stores in mining towns during the 19th and 20th centuries. They weren't exactly known for treating their residents (employees) fairly.
I'd expect a much more sophisticated 21st century take on company stores before some libertarian utopia.
I'd expect a much more sophisticated 21st century take on company stores before some libertarian utopia.
I wouldn’t assume it’s going to happen - ever seen eastern Connecticut or Maryland, upstate NY, etc.? There are plenty of places which have been waiting for that eventually since the 1800s, with nice downtowns and plenty of industrial space but simply an insufficient number of ways people can make a living.
There’s a wicked critical mass factor where you need enough now to be able to get people to start businesses there rather than moving, and there’s a nasty feedback cycle with shrinking tax bases cutting into city services which is hard to break out of.
SF and NYC probably haven’t priced out enough diversity to get through this but there are a lot of cities which only need a couple of employers to fold or relocate to start having big challenges. Attracting teleworkers quickly enough could help but a lot of old industrial and even office space will require a lot of work to convert into residences.
There’s a wicked critical mass factor where you need enough now to be able to get people to start businesses there rather than moving, and there’s a nasty feedback cycle with shrinking tax bases cutting into city services which is hard to break out of.
SF and NYC probably haven’t priced out enough diversity to get through this but there are a lot of cities which only need a couple of employers to fold or relocate to start having big challenges. Attracting teleworkers quickly enough could help but a lot of old industrial and even office space will require a lot of work to convert into residences.
There aren't quite as many thriving former industrial buildings as there are rusted hulks strewn about.
Not necessarily. For the prices to decrease, someone has to have to rent or sell. Many investors don't have such a need; especially in the commercial space.
I would imagine companies like WeWork may actually come out ahead here; because if your own company doesn't provide you with a place to work away from home, you might still need an office somewhere.
I would imagine companies like WeWork may actually come out ahead here; because if your own company doesn't provide you with a place to work away from home, you might still need an office somewhere.
Some people do have a need, and some people don't. The people who do have a need will put their properties on the market. Their prices will undercut everyone else's.
Anyone who was thinking of selling but doesn't urgently need to will delay until it's not so much of a buyer's market. But this means there will be a buildup in the number of people who have been waiting to sell. So prices will recover slowly because it will be necessary to chew through this backlog.
But, as in any downturn, there are people who are sitting on cash and looking for bargains. They will buy up some of what's for sale. (Downturns always create chaos, and there are people who are financially ruined and other people who multiply their wealth dramatically.)
Anyone who was thinking of selling but doesn't urgently need to will delay until it's not so much of a buyer's market. But this means there will be a buildup in the number of people who have been waiting to sell. So prices will recover slowly because it will be necessary to chew through this backlog.
But, as in any downturn, there are people who are sitting on cash and looking for bargains. They will buy up some of what's for sale. (Downturns always create chaos, and there are people who are financially ruined and other people who multiply their wealth dramatically.)
> Many investors don't have such a need; especially in the commercial space.
According to [1], as of 2015, 77% of commercial real estate is owned by private equity and REITs. Those types of investments primarily generate returns via dividends that come from rent. So it seems like most investors can't let them sit empty?
[1] - https://www.thebalance.com/what-is-commercial-real-estate-33....
According to [1], as of 2015, 77% of commercial real estate is owned by private equity and REITs. Those types of investments primarily generate returns via dividends that come from rent. So it seems like most investors can't let them sit empty?
[1] - https://www.thebalance.com/what-is-commercial-real-estate-33....
Commercial real-estate leases are often much longer than residential, so, they won't be as affected as fast.
As a result, there's also a whole bunch of subleasing going on in commercial RE, hence, it may end up being a whole chain of random third-parties taking the loss for the owners of the buildings (e.g., companies that need to move out of their office after outgrowing it, etc). Surprisingly, this might make an even better argument for the come-back of WeWork -- their whole model from the start was to makeover the buildings abandoned by the tenants.
Likewise, it may not affect the sale price at all, because noone would want to tank their own REITs, even if the market itself is stale -- the owners have a vested interest in keeping the bubble afloat.
As a result, there's also a whole bunch of subleasing going on in commercial RE, hence, it may end up being a whole chain of random third-parties taking the loss for the owners of the buildings (e.g., companies that need to move out of their office after outgrowing it, etc). Surprisingly, this might make an even better argument for the come-back of WeWork -- their whole model from the start was to makeover the buildings abandoned by the tenants.
Likewise, it may not affect the sale price at all, because noone would want to tank their own REITs, even if the market itself is stale -- the owners have a vested interest in keeping the bubble afloat.
When my office lease is up next year, we will likely not renew. WeWork or similar is the likely new “office”.
The ticking time bomb with commercial property is the debt. Many commercial real estate ventures are leveraged to the hilt. This is not unlike the housing crisis, although hopefully less painful because some underlying structural factors are less extreme (the government hasn’t felt obligated to buy the debt, unlike with home mortgages).
The same can be said for so-called 'Zombie' corporations. Many of them aren't growing and subsist because they have access to large quantities of low-interest debt, and partially due to the fact they employ many people, and one of the Fed's mandates is to promote low unemployment rates. When a lot of commercial real estate is sitting un- or underutilized, that's less workers and economic activity occurring.
Why is that bad? Billionaires will have fewer billions? Why is that apocalypse?
Because you're wrong? REITs and private equity are incredibly important for pension funds, funding insurance policies, sovereign funds , etc. To think billionaires would be the most impacted by a real estate collapse is incredibly naive and wrong. The financial system isn't some sort of simplistic billionaires vs the world game.
There will be some of that, but also - cubicles are coming back, so we are not going to be packed like sardines in noisy open-plan spaces. We might need all that space after all.
Most people owning commercial property dont give a fuuu. Unleased stores are sitting on NY market for 5-7 years and prices keep going up. It will all just sit idle as parked capital, and keep appreciating in value.
I was thinking the same thing, however due to distancing requirements won't the companies that do maintain a physical office require significantly more space?
We may see a decline in the popularity of space-efficient open office spaces.
We may see a decline in the popularity of space-efficient open office spaces.
Office management companies are worried. In the UK they, as well as commuting companies like Daily Mail Group, and overpriced sandwich shops like Pret, have realised their entire company is reliant on millions of sheep trudging 2 hours a day to an office block with no space to fight for a desk to have a day’s worth of meetings on skype.
A large anti WFH campaign run by the people behind brexit and linked to trumps campaign is set to start next month in the UK (the feelers you’re judge public mood have already gone out)
A large anti WFH campaign run by the people behind brexit and linked to trumps campaign is set to start next month in the UK (the feelers you’re judge public mood have already gone out)
link to info for this campaign?
Info on the government campaign to get people back to offices? See any UK newspaper for past week or BBC. The controversy regarding the hypocrisy of government agencies telling people to go back to offices (under pressure from biz groups who represent the various chains that survive off these commuters) while their own workers are WFH? Look to any newspaper from past three or four days for that one. Contra the earlier claim the Daily Mail group is not among those pushing for a return to regular commuting, other than their desire to parrot the Tory party line; in fact, they had one of the more pointed push-backs by showing that the same ministry that was telling companies to return workers to offices had less than 10% of its own employees working in the office (feels somewhat dirty posting a daily mail link, but it does reveal a bit of the controversy https://www.dailymail.co.uk/news/article-8675573/Just-5-work...)
safe link: https://web.archive.org/web/20200829123525/https://www.daily...
There's a bit of politics there - the Daily Mail are still right-wing xenophobes, but the present editor doesn't like the Johnson/Cummings team at all, and takes shots at them whenever he can.
There's a bit of politics there - the Daily Mail are still right-wing xenophobes, but the present editor doesn't like the Johnson/Cummings team at all, and takes shots at them whenever he can.
'Go back to work or risk losing your job': Major drive launched to get people returning to the office
Ministers warn that continuing to work from home could make staff ‘vulnerable’ to being sacked
Ministers warn that continuing to work from home could make staff ‘vulnerable’ to being sacked
I had to laugh when I saw this report [0]
[0] https://uk.reuters.com/article/uk-health-coronavirus-britain...
“Clearly people should be going back to work because it is safe to do so. There are already problems with workers’ mental health. It’s not just about hard-nosed economics,” the report said, citing a Cabinet minister.
[0] https://uk.reuters.com/article/uk-health-coronavirus-britain...
basically, (a) no actual office worker believes the government line on this (b) the employers - who are actually paying people to work from home - don't believe the government line either
>How stupid do they think we are?
what's the phrase? "A person is smart, people are dumb, panicky dangerous animals and you know it"?
what's the phrase? "A person is smart, people are dumb, panicky dangerous animals and you know it"?
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No need to call anyone sheep for having jobs to feed themselves and their families.
OP is presumably offering a characterisation, probably accurate, of the office management companies' thinking.
No need to offend the sheep
The fact that people are feeding themselves and their families is irrelevant. They're still doing something in a flock like a flock of sheep.
Is voting acting like a flock of sheep? Would sitting on a Jury be similar? Your view is terribly offensive.
To us or the flock? We are animals, analogies using other animals shouldn't be taken so heavy? Bring any herder to the city and see if he finds a difference.
"Flock to the polls" is a common phrase in headlines. So that’s some evidence that others see voting as flock behavior. I don’t think I’ve ever seen “flock to the jury boxes” though.
For whatever reason when I see a “flock to” headline I think of birds, not sheep. Specifically I think of flamingos.
For whatever reason when I see a “flock to” headline I think of birds, not sheep. Specifically I think of flamingos.
The wording is maybe a bit off, but the point about a media campaign is spot on. To quote Karl Marx: "The Tories in England long imagined that they were enthusiastic about monarchy, the church, and the beauties of the old English Constitution, until the day of danger wrung from them the confession that they are enthusiastic only about ground rent."
For example:
https://www.theneweuropean.co.uk/top-stories/richard-littlej...
For example:
https://www.theneweuropean.co.uk/top-stories/richard-littlej...
I think it’s worth asking what even is the monarchy? You’ll find your answer right there.
They’re landlords. Extracting ground rent from some of the most valuable land on the planet for generations, which has made that family a supranational entity even as nation states rise around it.
It always comes back to land. It has since the advent of agriculture: he who owns the land owns everything.
They’re landlords. Extracting ground rent from some of the most valuable land on the planet for generations, which has made that family a supranational entity even as nation states rise around it.
It always comes back to land. It has since the advent of agriculture: he who owns the land owns everything.
For that matter, one could also include the Church of England:
https://www.lovemoney.com/gallerylist/72713/the-uks-50-bigge...
https://www.lovemoney.com/gallerylist/72713/the-uks-50-bigge...
That link really does sum up the print media in the UK.
It’s more like cattle if you’ve ever been on the tube at rush hour, waiting for train after train because it’s so full, to hopefully end up in someone’s armpit, 20 metres underground.
There was the adage that Animal Welfare regulations would not allow this to happen.
Central Line in the summer.
It is a shame that your message got lost in the tone.
It's pretty clear that they are pushing in the media for people to return to work and quite often that is not going to be to the benefit of the people they are pushing back.
I on the other hand deliberately switched jobs to a role that was 100% remote forever because it is what is in my best interest.
It's pretty clear that they are pushing in the media for people to return to work and quite often that is not going to be to the benefit of the people they are pushing back.
I on the other hand deliberately switched jobs to a role that was 100% remote forever because it is what is in my best interest.
I really hate conspiracies, but this global cabal of ultra-rich, herding the sheep to slaughter for gigantic short-term profits while burning the world down, is beginning to get on my nerves.
But don't look there! Tom Hanks and Oprah are pedophile cannibals, and they need to be stopped at ALL costs!
But don't look there! Tom Hanks and Oprah are pedophile cannibals, and they need to be stopped at ALL costs!
Some potentially interesting or amusing details: This project would make use of a tennis club. Club members and tennis enthusiasts pressured the developers to make room for a series of underground tennis courts so valuable recreation space would not be lost, except of course during construction. Also, Pinterest has two other large buildings nearby one of which was built such that it can be extended upward as needed. Both of these buildings are now essentially empty.
Part of why they weren’t fully built out is that San Francisco’s Prop M caps the square footage of office space which can be built in any given year.
Notably, they paid $90M to cancel the lease.
Which is perfectly normal between businesses; pay $90MM to get rid of a $440MM lease contract. Heck, as a consumer, if I want to get rid of my car lease I need to pay a hefty penalty as well.
The notable part is not that they had to pay it. It’s that they chose to pay it. It reveals the magnitude of shift to WFH.
Assumption: same performance, increased employee satisfaction, lower costs, fewer expenses (company and employees).
Companies now just need a skeleton crew for IT Ops, HR, Accounting.
Especially for companies like Pinterest that have probably seen their revenue explode, it's a win win win.
Companies now just need a skeleton crew for IT Ops, HR, Accounting.
Especially for companies like Pinterest that have probably seen their revenue explode, it's a win win win.
Has their revenue exploded? I thought advertising revenue was down this year.
Etsy & Pinterest are both public companies and this info can be found in their quarterly filings.
TL;DR Yes, revenue has increased. Etsy is spending very strong in advertising with Pinterest getting large amounts of it.
Disclaimer: Position in both companies.
TL;DR Yes, revenue has increased. Etsy is spending very strong in advertising with Pinterest getting large amounts of it.
Disclaimer: Position in both companies.
Actually it seems to have flattened off:
https://www.statista.com/statistics/995107/pinterest-quarter...
https://www.statista.com/statistics/995107/pinterest-quarter...
I didn't entirely write what I meant correctly.
Etsy's revenue has greatly increase: https://www.statista.com/statistics/409407/etsy-quarterly-re...
A lot of Etsy's money did go to advertising. This has ended up in Pinterest's pocket. The fact Pinterest is flat during covid and entirely being an advertising company I consider still growth of revenue. The global advertising spend has greatly decreased, it'll eventually pick back up.
But, yes, you are entirely correct, on a direct statement level, revenue is flat.
Etsy's revenue has greatly increase: https://www.statista.com/statistics/409407/etsy-quarterly-re...
A lot of Etsy's money did go to advertising. This has ended up in Pinterest's pocket. The fact Pinterest is flat during covid and entirely being an advertising company I consider still growth of revenue. The global advertising spend has greatly decreased, it'll eventually pick back up.
But, yes, you are entirely correct, on a direct statement level, revenue is flat.
For a company to pay almost a hundred million dollars to not rent office space in downtown SF, that's the abnormal part, compared to 2010-2019.
Are you suggesting they would have walked free between '10-'19 ? I am quite certain they wouldn't have.
10-19 they would never have got rid of space - and arguably other potential tenants would have paid them to relinquish their rights
Yep, one company I work with closely made something like $16M through subleasing or leaseback (I forget the exact arrangement) in early 2019 after they decided to reduce their office footprint.
Exactly that. They could have easily found another renter/sublet it for no money lost (potentially even gained) those days.
I keep thinking this does not bode well for California. As more of these software companies embrace work from home, we may see an exodus of high paying jobs leaving the state for locations that are cheaper and better run. California currently gets a large chunk of the state budget from income tax.
I wonder about if/how this will affect New York as well. It's probably good for the USA in the long run to have more remote work and/or more tech jobs spread out across smaller cities. But there might be adverse implications for the areas stand to lose their statuses as "tech hubs".
Remote work does not mean you get away with State income tax.
Companies will change policies to reflect the work location as the office location. So the state income tax issue would be sorted.
Will?
My friend let’s talk in the present.
Cheaper location move can also mean less pay https://www.marketwatch.com/story/facebook-employees-may-fac...
My friend let’s talk in the present.
Cheaper location move can also mean less pay https://www.marketwatch.com/story/facebook-employees-may-fac...
Yes, but that's not the comment I am responding to was talking about. The parent comment was about having to pay CA state taxes after moving out of CA - which everyone has to do right now due to most of the employers not willing to update the work location. So just physically moving outside CA doesn't get you off the hook for CA taxes.
But if remote work becomes the norm, companies will update the location. My comment had nothing to do with updated incomes based on the location which is of course going to be the reality.
Disclosure: not a tax accountant, talk to to one if you want accurate information.
But if remote work becomes the norm, companies will update the location. My comment had nothing to do with updated incomes based on the location which is of course going to be the reality.
Disclosure: not a tax accountant, talk to to one if you want accurate information.
Yeah, if you’re trying to establish residency in another state, you probably need to tell your employer to use that state for your W2 so they stop deducting state tax and so California doesn’t think you still are earning money there. That means your employer knows you moved, and knows you’re saving all that money, so they will probably lower your pay.
I think you can still come out ahead if you have a ton of stock to vest, because they can’t cut that, but you still benefit from the lack of state tax there. But once the plague situation ends I think WFH employees will be in a weaker position and tend to get smaller refresh grants. It could be a great one-year-only move for anyone who’s due for a windfall from one of these IPOs.
I think you can still come out ahead if you have a ton of stock to vest, because they can’t cut that, but you still benefit from the lack of state tax there. But once the plague situation ends I think WFH employees will be in a weaker position and tend to get smaller refresh grants. It could be a great one-year-only move for anyone who’s due for a windfall from one of these IPOs.
California was already a rich state before Silicon Valley, so while individual cities might run into trouble, I don't think we should expect changes in software job patterns to be a disaster for the state as a whole. Pharmaceuticals, Hollywood, and agriculture can't really go remote.
I wouldn't bet on it. Hollywood has moved tons of filming out of the State, and agriculture here is now being threatened by water reductions to farmers. Pharmaceuticals I think is still doing well.
There is not going to be a mass exodus from high paid workers in California unless there is a mass exodus of perfect weather.
i don’t see most of the companies embracing work from home. with a few notable exceptions, the expectation is that as soon as the pandemic is over were expected back in the office.
I see a lot of vacant street-level real estate here in Vienna, Austria. These used to be shops and restaurants that I suppose we already on the brink before the crisis. Does anybody have an idea what will happen to all this space after the crisis is over?
New entrepreneurs will open their little boutiques or coffee shops or whatever else in them
This is exactly what I'm seeing here in Brooklyn. Lots of businesses went out of business but new ones have already taken their place.
Clever way to entrepreneur yourself into bankruptcy, with a second COVID-19 wave likely following the first.
Yeah - wow, I can't tell if I admire the entrepreneurial spirit or pity these people for taking such a blatant risk. Numbers where I am are hitting record highs (though they were previously relatively low).
They service low interest debt and a lease price locked in for 10 years
Distribution of failure probably won’t be worse than before for new entrepreneurs
People with money or access to capital are in a different world than people without
Distribution of failure probably won’t be worse than before for new entrepreneurs
People with money or access to capital are in a different world than people without
The difference is risk. If I take a risk like that, I end up living with my parents. They just fail and move on to the next failure, or a success.
Yep, there is a survivorship bias because they get to try multiple times in quick succession, compared to once every ten years, or just once, or never.
It's over. There will also be no appetite for another lockdown.
You don’t think they will be replaced by huge chains that are able to weather the poor economy?
There’s no magic in a huge chain. If locations don’t make money, they close them. Space tends to go to places with a profitable use.
Chains have many advantages over small businesses that give them more durability during downturns.
They have deep pockets, and greater ability to borrow. The location today is unprofitable, but they can afford to look out a year and decide to eat losses, expecting to make it up. Small businesses, especially retail, are much more susceptible to cash flow disruption.
They also have economies of scale that let them run at higher margins, so they often will be losing less during tough times because they are spending less.
You can see it in action in almost any trendy neighborhood. Each downturn kills some small shops, and chains survive. A unique shopping district in 2007 now starts looking like an outdoor Westfield Shopping center.
Is the Apple store in Brooklyn closing down because it isn't profitable today? They can sit on the lease for two years with zero revenue if they want. Meanwhile the boutique denim shop or tea house is already out of business 2 months ago.
They have deep pockets, and greater ability to borrow. The location today is unprofitable, but they can afford to look out a year and decide to eat losses, expecting to make it up. Small businesses, especially retail, are much more susceptible to cash flow disruption.
They also have economies of scale that let them run at higher margins, so they often will be losing less during tough times because they are spending less.
You can see it in action in almost any trendy neighborhood. Each downturn kills some small shops, and chains survive. A unique shopping district in 2007 now starts looking like an outdoor Westfield Shopping center.
Is the Apple store in Brooklyn closing down because it isn't profitable today? They can sit on the lease for two years with zero revenue if they want. Meanwhile the boutique denim shop or tea house is already out of business 2 months ago.
Chains also have the ability to leverage themselves much more than a small business can. We saw a lot of heavily leveraged chains going bankrupt within a month or two of the start of the lockdowns.
The huge chains aren't doing much better at the moment; they're hunkering down and closing lots of shops.
A lot of the big chains have been struggling in the UK. This started way before the thing came along.
Augmented reality and or virtual reality “game consoles”. If I had a spare billion or three laying around I would buy up some nice spacious commercial real estate in all of the metro areas of the US. Construct the piping and glue to present a uniform framework for every single one of those locations. Think for now a single 20x20 square room, something achievable regardless of whether it was an old Best Buy or an old grocery store.
These locations become your PlayStation or game console. You need your own killer content like Zelda or something to get off the ground, but once you can offer development tools that offer access to such a large audience, the entrepreneurs will come and start building content for you.
You provide a set number of props like staircases, blocks, etc that can be arranged into a specific game rooms layout and then painted by the developers game giving you much more room than just a big open area to work with.
There are some really good POC’s out there, but it’s just a single location like a laser tag place servicing a single area. That’s not enough to build a critical mass of developers or players.
These locations become your PlayStation or game console. You need your own killer content like Zelda or something to get off the ground, but once you can offer development tools that offer access to such a large audience, the entrepreneurs will come and start building content for you.
You provide a set number of props like staircases, blocks, etc that can be arranged into a specific game rooms layout and then painted by the developers game giving you much more room than just a big open area to work with.
There are some really good POC’s out there, but it’s just a single location like a laser tag place servicing a single area. That’s not enough to build a critical mass of developers or players.
I remember this from back in the 90's when I was a kid. You'd get into this little platform and they'd lower an arm with a ring around you to keep you from walking out and hurting yourself. Then they put a heavy, bulky helmet on and gave you a pointer device to hold straight out at arms length for the entire time you played. It was super fun even with terrible graphics but by the end of it my arms and neck were awfully sore.
And as far as I can remember, my brother and I were the only two customers we ever saw in there during weekends and we went at least twice a month until it went out of business
And as far as I can remember, my brother and I were the only two customers we ever saw in there during weekends and we went at least twice a month until it went out of business
I think you are on to something with that. I gave the Occulus experience a try at the World Trade terminal (both the Star Wars and Avengers experience) and it really felt like a type of interactive cinematic experience. We were given guns, the wind would blow in our face when we looked out of the helicopter, walked around the corridors, etc.
The whole space looked like it might have been 1200 square feet.
The whole space looked like it might have been 1200 square feet.
This has been the dream since consumer VR took off 5 years ago. It never materialized because it turns out people just don't care that much. The tech is impressive, but it simply isn't good enough to be compelling beyond the first 10 minutes of wow factor for most people. VR will remain a niche within a niche until the hardware is truly ready for the mainstream, which will require feather light fully wireless headsets with 100% FOV, depth perception, and perfect controller-free hand/pose tracking.
I have seen vr arcades similar to this, but only in super high traffic tourist areas. Orlando and Vegas both have places you can rent a vr booth. But I think you really need some place you can charge a lot and have a huge amount of potential customers constantly.
Well in NYC I hope it finally means have space to keep the god damn trash off the sidewalk.
It'll also be interesting to see the impact on housing. Lots of people probably don't have the space to set up for working from home well, particularly if you're talking about families with 2 people working plus kids doing some amount of remote schooling.
Single? Viable. Young couple in a 1-bedroom apartment? Who's working at the new desk in the bedroom and who's at the kitchen table? Add a couple kids in and it just gets tougher.
Even if they weren't doing it before people are now going to be looking for an extra office-suitable bedroom.
Single? Viable. Young couple in a 1-bedroom apartment? Who's working at the new desk in the bedroom and who's at the kitchen table? Add a couple kids in and it just gets tougher.
Even if they weren't doing it before people are now going to be looking for an extra office-suitable bedroom.
If you no longer have to commute to an office, presumably you can swap that 1 bedroom apartment for a house located a bit further afield.
that's assuming the only thing driving your desire for a 1 bedroom apartment is the desire to be next to an office.
the current situation is weird in that COVID has disrupted nearly all non-home spaces, not just the office. But once restaurants, theaters, museums, nightlife etc. are back in business some will still desire to be near activities they're doing all the time.
I'm personally interested in how this will really impact important working "third places" like coffee shops, libraries, and WeWork style spaces once people are allowed to go to those again.
the current situation is weird in that COVID has disrupted nearly all non-home spaces, not just the office. But once restaurants, theaters, museums, nightlife etc. are back in business some will still desire to be near activities they're doing all the time.
I'm personally interested in how this will really impact important working "third places" like coffee shops, libraries, and WeWork style spaces once people are allowed to go to those again.
i’m confused why people have this impression...
isn’t the expectation for the vast majority of people that the second this pandemic ends, were expected back in the office?
and if that’s the case i can’t really go and buy a home in the suburbs
isn’t the expectation for the vast majority of people that the second this pandemic ends, were expected back in the office?
and if that’s the case i can’t really go and buy a home in the suburbs
I think this is less of a seismic shift than a lot of people are reading, since the building in question isn't expected to finish construction for years. I think even the most pro-office people would admit that pre-pandemic forecasts of office needs 3 years in the future are now unreliable.
As a company, you don't need to be committing to 100% remote to take the very prudent step of putting any real estate expansion plans on hold for which it makes financial sense to do so. If nothing else, it's a fair bet you'll have more negotiating leverage in 6 months or a year.
Exactly. Pinterest still is holding onto existing sf office space.
They are right that it probably doesn’t make sense to pay top dollar for this spot when other spaces in east bay, South Bay and Seattle are cheaper with access to same talent.
The Bay Area will still thrive but sf proper-city will have a rough time
They are right that it probably doesn’t make sense to pay top dollar for this spot when other spaces in east bay, South Bay and Seattle are cheaper with access to same talent.
The Bay Area will still thrive but sf proper-city will have a rough time
Many commercial properties and apartment complexes are owned by pension funds and REITs. There is an incentive to keep increasing profits to gain customers, payout the pension costs, etc.
What will happen if retirees lose this income? Or on the flip side, how will cities be affected when its citizens' income is not siphoned away from the city?
What will happen if retirees lose this income? Or on the flip side, how will cities be affected when its citizens' income is not siphoned away from the city?
Speaking with two business partners (UK and Aus). Retail retail rental prices have not seen a reduction due to Covid in large cities. Granted the businesses here are in retail but I would imagine rental prices to drop.
My Aus partner mentions Westfield often and how arrogant their attitude has been during the crisis. Especially when many stores in these flagship centres are still closed and some even face bankruptcy.
My Aus partner mentions Westfield often and how arrogant their attitude has been during the crisis. Especially when many stores in these flagship centres are still closed and some even face bankruptcy.
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Bay area employees have a strong incentive to return to the office, since a major shift in location of their companies will lead to a major shift in their compensation, fast. It's likely that the rest of the world , cash starved, will move faster to embrace remote. Inevitably it seems in the medium term even bay area will be dragged along.
I think that some of this WFH stuff is like Pandora's box. Employers are not going to be able to stuff it all back in the box now that it is out. There will still be offices, and people will still attend in person. I'm just not sure if it will ever be "The Norm" again.
Take a generic local tech company for example. Its employees are now all WFH, some enjoy it and few others don't, while some really need it for precautionary health reasons. Does HR have enough legal room to tell everyone that the health crisis is over and that they HAVE to return to an office "or else", do they get to choose who needs and doesn't need WFH? I see litigations surrounding personal safety and fairness down that road. We haven't even gotten to the part of the pandemic where there is a vaccine available, but anti-vaxxers are all over... I'm staying at home thanks... Even if the local tech company has HR figure out how to pull this off, and moves to force those workers back; the employees now have the option of other companies that WILL offer the WFH that they want. And these companies can possibly draw from state-wide or possibly even national talent pools. Those are the companies that will attract and retain the top talent.
Take a generic local tech company for example. Its employees are now all WFH, some enjoy it and few others don't, while some really need it for precautionary health reasons. Does HR have enough legal room to tell everyone that the health crisis is over and that they HAVE to return to an office "or else", do they get to choose who needs and doesn't need WFH? I see litigations surrounding personal safety and fairness down that road. We haven't even gotten to the part of the pandemic where there is a vaccine available, but anti-vaxxers are all over... I'm staying at home thanks... Even if the local tech company has HR figure out how to pull this off, and moves to force those workers back; the employees now have the option of other companies that WILL offer the WFH that they want. And these companies can possibly draw from state-wide or possibly even national talent pools. Those are the companies that will attract and retain the top talent.
All superstars will leave if forced.
My friend who is a staff engineer. He lives close to the office.
Before covid, his kids meet with their parents often. They live close to each other.
You can bet that he would not increase the risk of the grandparents getting covid. Not even by 0.0001%. It's a known risk that can be avoided.
Forcing him to come back to the office will immediately result in him leaving.
Working life will never be the same again.
My friend who is a staff engineer. He lives close to the office.
Before covid, his kids meet with their parents often. They live close to each other.
You can bet that he would not increase the risk of the grandparents getting covid. Not even by 0.0001%. It's a known risk that can be avoided.
Forcing him to come back to the office will immediately result in him leaving.
Working life will never be the same again.
I'm curious if newly remote employees are getting monthly stipends for internet and electricity? Is that pretty normal or are those costs being pushed on to the employee?
If your employer _requires_ you to WFH, say because their office is not open due to COVID-19, California law requires you to be reimbursed for reasonable expenses associated with WFH, including Internet access. Many employers already had this kind of reimbursement in place, though.
Interesting. I was the only remote person (by choice) on a team before covid. Now the whole team is remote because of closed offices in LA. Feels weird to now start expensing these things only while the office is closed, but it sounds legally I could?
Legally you absolutely could. It’s like anything else you expense in the course of doing your job. In fact your HR/exec team is falling down on the job if they haven’t announced new policies, since your office is closed.
Hmm, that describes me but without reimbursement. Is there a handy website / reference you know of? I'd like to bring this up with my employer.
A quick google found a law firm that analyzes it from the employer perspective, but it’s a good guide to the law and whether or not you should be covered:
https://www.mintz.com/insights-center/viewpoints/2226/2020-0...
https://www.mintz.com/insights-center/viewpoints/2226/2020-0...
Privatize the profits - socialize the costs.
The big question that nobody can answer is whether this shift is permanent.
Part of the shift comes from the fact that we are in a temporary, exceptional situation. However, views about remote work may have been changed through first-hand experience.
People have been working in offices for literally thousands of years. It would be an epic, once-in-a-millennium historical change if we moved away from that.
But that doesn't mean it's impossible. People have also been using paper for the written word for literally thousands of years, and we've made a partial but permanent shift away from that. Maybe remote work will follow a similar pattern.
Part of the shift comes from the fact that we are in a temporary, exceptional situation. However, views about remote work may have been changed through first-hand experience.
People have been working in offices for literally thousands of years. It would be an epic, once-in-a-millennium historical change if we moved away from that.
But that doesn't mean it's impossible. People have also been using paper for the written word for literally thousands of years, and we've made a partial but permanent shift away from that. Maybe remote work will follow a similar pattern.
people have been working in offices for a few decades. Before that they worked in factories, before that they worked at home, either in the field, or in the shop in front of their house (roman times).
Whether it's permanent or not depends on how much energy has been expended to switch habits. Once people settle in a new routine, there are some benefits of remote work that are simply irresistible and probably irreversible (such as taking back control of time).
Whether it's permanent or not depends on how much energy has been expended to switch habits. Once people settle in a new routine, there are some benefits of remote work that are simply irresistible and probably irreversible (such as taking back control of time).
Hooray! The tennis club is spared (for now)
The article's actual title—Pinterest cancels huge SF office lease in unbuilt project, citing work-from-home shift—was 6 characters too long.
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I've put the comma back in and sacrificed SF.
What shift? The pandemic?
I think the future might be shared work spaces (WeWork) but in suburbia - so people can come to work, but not necessarily having to spend 4 hours a day on a commuter train.